In a recent Fannie Mae Selling Guide update – the GSE addressed this issue of lenders who have been reducing opinions of market value:
In the past, Fannie Mae did not provide requirements concerning lenders making changes to the opinion of market value reflected in the appraisal report. During Fannie Mae’s post-purchase reviews, cases were identified where the lender had reduced the opinion of market value in the appraisal report based upon underwriter judgment, automated valuation models, or other methodology. Therefore, Fannie Mae has updated its appraisal policies to address the practice of lenders changing the appraiser’s opinion of market value and also to provide specific guidance when an appraisal is considered deficient.
Now instead of just making these based on the underwriter’s judgment or other computer aided reports – Fannie Mae is requiring that lenders go back to the original appraiser to address concerns. I love the fact that they specifically address that :
“Any request for a change in the opinion of market value must be based on material and substantive issues and must not be made solely on the basis that the opinion of market value as indicated in the appraisal report does not support the proposed loan amount”
This is just one more reason why the homeowner or prospective buyer should always get a copy of the appraisal! Do you think there has ever been a case where the lender just wasn’t “comfortable” with the appraised value? (AKA – we don’t like something about this borrower, so we cut the value for the appraisal and deny the loan!)
Buyers or refinancers should ALWAYS, ALWAYS, ALWAYS get a copy of the appraisal report to know the facts themselves! And here is another tip: Appraisers typically CANNOT tell you the appraised value. Since we are contracted by the lender (or through an appraisal management company {AMC} ) – we can ONLY deliver the results to the client who ordered the appraisal. We cannot disclose our findings or results to anyone other than the specific client noted on the report.
If you are looking for an appraisal or an appraisal review in the Clermont, Florida area (or sounding counties such as Lake, Orange, Osceola, Polk or Seminole) – please consider an appraisal company with experience, geographic competency, and a penchant to dig into the numbers to reveal the truth! AmcAppraisalsinc.com
Meet me for coffee!http://freedomby2.biz
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Good post, Richard. I always inform the owner on a refi that they have the right to a copy of the appraisal report. For several years when I first entered the profession, it was standard policy and legal for the lender to refuse to provide a copy of the appraisal. What was actually happening was that, if for any reason they didn't want to make the loan, the appraiser was made the scapegoat and blamed with the comment that the appraisal came in low. In several cases where I had the opportunity to recontact the borrower at a later date (sometimes doing an appraisal for a second lender), the truth would surface.